Geithner: Taxes on small business must rise to prevent government from 'shrinking'

What we have here is a fundamental disagreement on the size of government. Like most Republicans, Rep. Renee Ellmers wants to shrink the government and lower taxes to boost economic growth, while Treasury Sec. Tim Geithner would tilt the ledger on the side of expanding government.

Treasury Secretary Timothy Geithner told the House Small Business Committee on Wednesday that the Obama administration believes taxes on small business must increase so the administration does not have to “shrink the overall size of government programs.”

When Ellmers finally told Geithner that “the point is we need jobs,” he responded that the administration felt it had “no alternative” but to raise taxes on small businesses because otherwise “you have to shrink the overall size of government programs”—including federal education spending.

“We’re not doing it because we want to do it, we’re doing it because we see no alternative to a balanced approach to reduce our fiscal deficits,” said Geithner.

Of course, the alternative is staring him in the face: Cut spending, spur economic growth, and end up collecting more in tax receipts. But he and his administration are not willing to do that, not for economic reasons, but for ideological reasons.